Advice on Pre-Foreclosure Offer

[Nick Draper]

Hey everyone, 

Long time listener, first time caller.

Here's the situation:

I'm interested in a pre-foreclosure that has been listed with a realtor for sale in my neighborhood since January. The owner died about 6 months ago, and the house received a NOD in February. From my understanding he had no heirs, so I don't know who listed the house. No one is currently living in it. I checked probate court records and couldn't find anything. They've dropped the price $50k in the last 3 months.

The house definitely needs updating compared to other homes in the area (it's an older home), but it has potential. I'm very interested in making an offer before it gets foreclosed, which I assume will be sooner than later based on the NOD date.

The house is listed right now at $550k. Default amount is $380k. The median home price in the area according to MLS sites is approx $410k-$600k.

What would be a good starting point? Any advice?